The new show business

By by Paul Demery

Online video shows rather than tells. Consumers like it, and online retailers are learning how to use it more effectively.

When fashion-conscious tweens and teens think of where to find cool clothes to wear while strutting down school halls this fall, they may not initially focus on Sears, a retailer better known for Kenmore refrigerators and Craftsman screwdrivers.

Then again, maybe they will.

Sears, Roebuck and Co., through an ambitious online video strategy built around Disney Channel singer and actress Selena Gomez, pulled out all the stops this summer to reach kids as they created their back-too-school look. Gomez, with the energy of a, well, Disney pop star, and clad in Sears apparel, prances, dances and jumps her way through a series of videos that energize the retailer`s merchandising and marketing strategies, says Dana Schueller, director of marketing, planning and program development for Sears parent Sears Holdings Corp.

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"Our goal is that these videos will continue to increase awareness and consideration of Sears as a destination for back-to-school fashions," she says.

Lounging with video The videos, distributed through YouTube.com as well as other social networking sites, are based at Sears microsite ArriveLounge.com, which engages visitors with videos featuring Gomez and other Disney stars from the Wizards of Waverly Place TV show, and lets shoppers enter an online Style Room, where they can click on the stars` images to purchase their outfits on Sears.com.

To build on the excitement of visiting ArriveLounge.com, Sears is also running a contest there that lets visitors submit homemade rock videos to compete for a spot in the Sears Air Band, which will perform this fall at the MTV Video Music Awards.

What was that about refrigerators and screwdrivers? Since launching in June, the video-heavy ArriveLounge.com has more than doubled the number of visits and average time per visit for Sears compared to its 2008 online back-to-school campaign, Schueller says. More than 1,000 contestants have submitted videos for the Air Band performance, videos that are getting widely distributed by visitors throughout the web, she adds.

Online retailing, meet the power of online video.

Online video has emerged as a key component of successful online retailing that can not only engage consumers and lead to sales, but build store traffic and reduce customer service calls. And experience is teaching online retailers valuable lessons about how to best use video, such as how long consumers will watch a video and when text overlays can improve results.

Video fans The growth of video on e-commerce sites mirrors what`s happening all across the Internet, as consumers become increasingly used to seeing video everywhere, from news sites to Facebook pages. And those videos are getting watched.

The number of U.S. Internet users who viewed online videos reached 157 million in June, a record number for a single month, according to comScore Inc.`s Video Metrix service. Exceptional news events, notably the death of pop music artist Michael Jackson, boosted June`s total. But online video viewing has been steadily rising over the past few years, according to the Pew Research Center`s recent report, "The Audience for Online Video-Sharing Shoots Up," which is based on a survey this year by the Pew Internet & American Life Project.

Underscoring the importance of online video as a marketing tool for retailers, 62% of U.S. adult Internet users watch videos on YouTube and other video-sharing web sites, up from 33% in late 2006, the report says.

That level of adoption makes video no longer optional for a successful e-commerce site, some retailers contend.

"Retailers who don`t have video will be at a disadvantage," says Gordon Magee, Internet marketing and media manager for pets supplies e-retailer Drs. Foster & Smith, which has about 300 videos on DrsFosterSmith.com. "Video is to the Internet today what the Internet is to retail. In the old days a web site was a bonus, but now itÕs a requirementÑand today video is in the same category. When people go to a web site, they want video to be entertained and to learn."

Adds Peter Cobb, co-founder and senior vice president of marketing at eBags.com, where about 230 videos attract about 1,700 unique viewers every day, "There may be 20 or more e-commerce sites that sell the exact same product, often at the same price, so all of us in the online retailing business have to come up with ways to provide compelling entertainment and information, and present it in a way that makes us appear trustworthy, so people feel comfortable giving us their credit card. This gets to why we have online video, because it goes to the top of the list of what enables us to do these things."

Low-cost option Not all retailers go to the expense of producing TV-quality video, as Sears did with Selena Gomez. Some present low-cost video slide shows of products and grainy user-generated content. Production costs can range from about $50 to several thousand dollars per video, depending on volume and whether it`s a simple product demonstration or a `featurette` with professional actors, scripts and movie sets, says Raj Gajwani, CEO of SilverDock.com LLC, a video production and consulting firm.

Some retailers with ambitious video programs say they get by on a shoestring budget. "For us it is pretty cheapÑone person who handles all planning, production, editing and monitoring," Cobb says.

But, whatever the quality and expense, many retailers report that moving beyond static images and text to some form of online video attracts and engages shoppers.

At Blendtec, a kitchen blender manufacturer that dramatically raised its profile three years ago when it garnered millions of views on YouTube of videos showing CEO Tom Dickson blending things like golf balls and iPhones, video has contributed to a 700% rise in sales since then, marketing manager George Wright says.

The exposure from Internet videos has lifted Blendtec`s profile through word-of-mouth marketing, copycat videos loaded on YouTube by Blendtec`s followers, and a more universal understanding of what the company sells, Wright says.